The chancellor George Osborne’s axe has fallen on the government departments that have not been ringfenced. The cuts were not as high as originally planned in the July budget, but will still see a reduction in jobs and spending.

Announcing his autumn statement, Osborne said it was “irresponsible” to say public spending must always go up, or that cuts to public budgets would inevitably hit public services. “If you’re bold with your reforms, you can have both,” he said, adding that the government had demonstrated already that the country could have both lower public spending and better public services.

Dave Penman, general secretary of the FDA union, which represents senior civil servants, saidthe sheer scale of reductions in public spending announced was eye watering. “Despite months – if not years – of preparation, the government has once again failed to demonstrate, to both public servants and to taxpayers, how it will cut resources so dramatically while ensuring public services are maintained,” he said.

Penman said many departments are facing cuts of about 50% over a decade. “Unless public services are transformed, these budget cuts can only result in the decimation of key public services. The question has to be asked: how can the billions of pounds of capital investment announced by the chancellor be delivered efficiently by a civil service stripped of resources and people?”

Mike Turley, UK and global head of public sector at Deloitte, said that more digital services, new funding formulas and new structures and asset sales would all mean that the civil service is going to need to increase its productivity. “We didn’t hear enough on how this will be delivered against a background of rising demand, headcount reductions and with staff morale already at record lows,” he said. “The public sector will need to retain its best people to meet these profound changes.”

Peter Riddell, director of the Institute for Government thinktank said that while the chancellor had announced a much smaller squeeze on departmental spending plans than he had indicated in his July budget. “But despite the reduced scale of cuts in the immediate future, there are still big challenges in implementation if the plans are to be achieved,” he said.

Cuts

Osborne says total managed expenditure – the government’s total spending – will be £756bn this year, rising to £773bn next year, £787bn the year after, £801bn in 2018-19 and £821bn in 2019-20. After that, it will rise broadly in line with the economy.

Osborne says government spending was 45% of GDP in 2010. Now it is just under 40% and by the end of the spending review period it will be down to 36.5%. At that level it is affordable, he says.

One of the previous criticisms had been the rollercoaster effect of cuts over the next few years, but the Office for Budget Responsibility said the chancellor’s plans will make the path of real cuts in public services spending slightly smoother than had been previously announced in July and March.

The bigger picture

Julian McCrae, of the Institute for Government (IfG) thinktank, has five good pointers to the autumn statement, including a reminder that waiting for the big picture from the Office for Budget Responsibility is always a good idea.

The IfG’s graph on which departments are still “in play” for the biggest cuts has been much-shared on social media:

Part of the bigger picture is the chancellor’s pledge to put public money into the country’s infrastructure, but Guardian journalist Juliette Jowit has explained why people should be sceptical about government infrastructure plan announcements. In reality, she points out, government spending on infrastructure fell in the last parliament.

Will McWilliams, head of government infrastructure advisory at consultant Grant Thornton, said the investment in infrastructure, including £12bn for local growth funds and the 50% increase in the Department for Transport’s capital spend, had sent a “pretty strong message” about the government’s commitment to infrastructure, which he welcomed as key to creating long-term economic growth. But McWilliams said the big question was how government is going to work with the private sector.

Civil Service World has a good roundup of what the spending review will mean for cross-government reforms of estate management, assets and workforce planning.

More on digital

There was an unexpected boost for the Government Digital Service, which got extra investment of £450m, as the chancellor announced that everyone would have a digital tax account by the end of this parliament.

Katie Evans, an economist at the Social Market Foundation, welcomed the move, saying GDS was “critical” to improving government efficiency. It will be particularly welcome inside the GDS, which has recently seen its former head, Mike Bracken, leave, along with several senior managers.

Radhika Chadwick, a partner in EY’s government and public sector business, said the £1.8bn earmarked for digital transformation signalled a real ambition to tackle fundamental reform of government services, but said there needed to be a major rethink of all services. “Putting digital at the front of a programme or initiative won’t mean a sudden improvement in delivery,” she pointed out. With many government systems more than 30 years old, it will take many years to overhaul them, she said.

Alan Leaman, chief executive of the Management Consultancies Association, said digital services should be central to successful public sector change, with the GDS having made a “promising start”.

Leaman also said today’s review confirmed that almost all government departments no longer simply face the dilemma of achieving more for less, they now need to achieve more for a lot less. “The scale and complexity of the challenges facing the public sector are enormous, particularly in the non-protected areas of government spending. The government’s ambition to reform and reshape much of the public sector must now be translated into a radical and practical five-year programme of public service reform.”

Capital spend rises, but operational spending falls

Department for Transport spending will be cut by 37%, but its capital spending will go up by around 50% to £61bn over the course of this parliament. This will fund investment in projects such as HS2 and electrification of the Midland mainline in the east Midlands, including £13bn on Transport in the north and £11bn in London.

The move was welcomed by the Institute of Directors, which said infrastructure spending was a top priority for its members, including investment in broadband, roads and local rail.

But BBC journalist Evan Davis asked how it would be possible to cut civil servants in departments like transport and the environment department, while spending more on capital projects.

Evan Davis (@EvanHD)

Question: can you cut civil servants in departments like transport and DEFRA, while spending more on capital projects? #AutumnStatement

The Department for the Environment, Food and Rural Affairs sees its budget fall by 15% in the spending review period, but there will be £2bn for flood defences. The Department for Culture, Media and Sports sees its operational budget fall by 20%, but some arts spending increases and museums stay free. The Department for Business, Innovation and Skills budget is being cut by 17%.

The Department for Communities and Local Governmentbudget will be cut by 29%, but within this the grant allocated to local government will fall by 56%. This is to be offset by other changes to local funding, so that the overall funding to local authorities is predicted to fall by just 6.7%.

We already know as a result of the defence review earlier this week that the Ministry of Defence is to cut the number of civilians it employs by almost 30% by the end of the parliament. Dai Hudd, the Prospect union general secretary, called this “devastating”. But by 2020-21, the defence budget will have risen from £34bn to £40bn.

The Home Office administration budget will fall by 30%, within an overall resource budget that is down by 4.8%. There is to be investment of £1bn in the next generation of 4G communications network for the emergency services and an increase in the counter terrorism budget by 30%. “Now is not the time for further police cuts,” said Osborne and there are no cuts in the police budget in England and Wales, and an increase of £900m in cash terms by 2019-20.

The government said it will drive down the cost of police procurement by up to £350m, with savings to be made through forces merging their back office functions. It wants to see greater collaboration between police forces and with other public and emergency services.

The Foreign Office budget is protected and the aid budget at the Department for International Aid and Development will rise to £16.3bn by the end of the parliament.

The Department for Work and Pensions resource budget has been cut by 14%, with the chancellor saying some of the savings will come from “co-locating” job centres.

The Ministry of Justice will see a 15% cut by 2019-20, with its administrative budget falling by 50% over the same period. Under-used courts will be closed, saving £700m, which will be used to introduce new technology into the court service. Nine new prisons will be built and inner-city prisons will be sold off for housing.

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